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Support policies drive Nansha' s financial leasing industry

Updated: 2019-08-23

Guangzhou’s Nansha district has made breakthroughs in financial leasing, cross-border RMB transactions and cooperation with Hong Kong and Macao’s financial institutions since the State Council ratified 15 policies to support the district’s financial innovation in 2014.

A second-hand jet from China Southern Airlines was sent to Ireland with its fuselage dismantled through Nansha Port on July 12 this year, which was the first cross-border airplane-stripping deal in the country.

In the first half of this year, China Southern Airlines international financial leasing company disposed of three complete units and also the fuselage of an Airbus A320-200 for the global market.

“Resale of a used jet’s parts contributes more to maximize the value than selling it as a whole, and the most valuable part is the engine,” said Xu Feng, general manager of the company.

China Southern Airlines purchased a used Boeing787-9 Dreamliner on March 31 this year through a “Hong Kong plus bonded port area” program, which was the first cross-border sublet purchase in the Guangdong-Hong Kong-Macao Greater Bay Area.

Ireland was the world’s largest aircraft leasing market and aviation finance center for a long time by virtue of its preferential tax policy, but now the global aviation market’s development center of gravity has moved to the Asia-Pacific region.

The Hong Kong SAR rolled out a new tax system in July 2017, providing sharp tax relief to the aircraft leasing industry. This year, Nansha has opened up channels of cooperation with Hong Kong in the financial service field.

The effective tax rate of the aircraft leasing industry in Hong Kong was reduced to the range of 3 to 6 percent, lower than that in Ireland (12.5 percent) and Singapore (8 percent), according to international accounting firm PwC’s preliminary analysis.

The district established a professional service team offering assistance to those financial leasing enterprises by a standard of “expert plus steward”to help them save significant time.

The district has leased out 117 civil aircraft under contracts worth$7.6 billion since September of 2015, making it the top place for aircraft leasing clusters in China.

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